Australian trade and business leaders have refused to embrace the latest regional free trade push by the U.S. to imprint its influence on the Asia-Pacific through the Trans-Pacific Partnership (TPP).
As details of a trade deal began to emerge on Sunday from Hawaii where U.S. President Barack Obama and eight other leaders involved in the TPP negotiation met on the sidelines of APEC summit, concern at the opaque arrangement and its peculiar objectives reverberated through Australian economic circles.
While Australian Prime Minister Julia Gillard and Trade Minister Craig Ferguson confirmed a 'broad outline agreement' had been reached among Australia, the U.S., New Zealand, Singapore, Malaysia, Vietnam, Chile, Peru and Brunei, the lack of detail and the glaring omission of Australia's key trading partner, China, has immediately raised questions to the pact's viability.
The U.S. has been hot and cold when it comes to securing consistent trade agreements in the Pacific, most notably waiting to sign on agreements when the economic winds blow most favorably for the U.S., to the detriment of its partners. Some deals have been on the shelf for years, while 'buy American' clauses are standard practice for the economic heavyweight when dealing with smaller, Asia-Pacific Economic Cooperation (APEC) members.
These seeds of doubt have a strong footing in the minds of Australia's economic Tsars. Heather Ridout, the influential boss of the Australia Industry Group, said that whatever positive steps are made remain worthless until the pact is signed, sealed and delivered, which could be more than a year away.
"What we do not want is to see a less than optimal agreement with whole sectors carved out of it," she said, referring to the U.S. strategy for inoculating key American sectors from competition through government subsidies and cherry-picked trade barriers.
Australian Manufacturing Workers Union spokesman Dave Oliver said the Gillard Government would be best advised not to rush any agreement led by the U.S..
"We know the United States has been keen to try and pare back our pharmaceutical benefits scheme. We know the United States is keen to ensure they can extend the patent laws on pharmaceutical products, which will make it harder for our pharmaceutical manufacturers to manufacture generic products." He said.
"We ought to make sure we've got core issues addressed - labor standards, environmental standards, proper access to their markets - particularly for our manufacturers, and ensure that we can maintain our sovereign rights as well."
Peter Drysdale is Head of East Asian Bureau of Economic Research, Emeritus Professor of Economics and Visiting Fellow in Policy and Governance at the Australian National University.
"If the Trans-Pacific Partnership does not make a substantial improvement for Australia from the U.S.-Australia free trade agreement, it will be a waste of time," Drysdale said.
Speaking to local radio, Prime Minister Gillard was forced to face down concerns from Australian unions, the green party and regional experts who urged caution over any deal that isolated both key trading partners and key industries.
Gillard defended the U.S. track record on free trade, as she prepares for the U.S. President Barack Obama's historic visit to Australia this week.
"He brought the group together and has certainly spoken in the language of ambition of getting this together before 2012." she told ABC radio.